Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company. Direct method: This method uses the basis of cash for preparing the cash flows of statement. To state: the formula used under direct method for computing cash receipts from customers.

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Answer 1

Question

Chapter 12, Problem 20Q

(a)

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Direct method: This method uses the basis of cash for preparing the cash flows of statement.

To state: the formula used under direct method for computing cash receipts from customers.

(b)

To determine

To state: the formulas used under direct method for computing cash payments made to suppliers.

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The following data were selected from the records of Fluwars Company for the year ended December 31, current year: Balances at January 1, current year: Accounts receivable (various customers) $ 111,500 Allowance for doubtful accounts 11,200 The company sold merchandise for cash and on open account with credit terms 1/10, n/30, without a right of return. The following transactions occurred during the current year: Sold merchandise for cash, $252,000. Sold merchandise to Abbey Corp; invoice amount, $36,000. Sold merchandise to Brown Company; invoice amount, $47,600. Abbey paid the invoice in (b) within the discount period. Sold merchandise to Cavendish Inc.; invoice amount, $50,000. Collected $113,100 cash from customers for credit sales made during the year, all within the discount periods. Brown paid its account in full within the discount period. Sold merchandise to Decca Corporation; invoice amount, $42,400. Cavendish paid its account in full after the…

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Answer 2

Question

Chapter 12, Problem 20Q

(a)

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Direct method: This method uses the basis of cash for preparing the cash flows of statement.

To state: the formula used under direct method for computing cash receipts from customers.

(b)

To determine

To state: the formulas used under direct method for computing cash payments made to suppliers.

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Answer 3

Question

Chapter 12, Problem 20Q

(a)

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Direct method: This method uses the basis of cash for preparing the cash flows of statement.

To state: the formula used under direct method for computing cash receipts from customers.

(b)

To determine

To state: the formulas used under direct method for computing cash payments made to suppliers.

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Answer 4

Question

Chapter 12, Problem 20Q

(a)

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Direct method: This method uses the basis of cash for preparing the cash flows of statement.

To state: the formula used under direct method for computing cash receipts from customers.

(b)

To determine

To state: the formulas used under direct method for computing cash payments made to suppliers.

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 20Q

(a)

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Direct method: This method uses the basis of cash for preparing the cash flows of statement.

To state: the formula used under direct method for computing cash receipts from customers.

(b)

To determine

To state: the formulas used under direct method for computing cash payments made to suppliers.

Answer 6

Chapter 12, Problem 20Q

(a)

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Direct method: This method uses the basis of cash for preparing the cash flows of statement.

To state: the formula used under direct method for computing cash receipts from customers.

Answer 7

Chapter 12, Problem 20Q

(a)

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Direct method: This method uses the basis of cash for preparing the cash flows of statement.

To state: the formula used under direct method for computing cash receipts from customers.

Answer 8

(b)

To determine

To state: the formulas used under direct method for computing cash payments made to suppliers.

Answer 9

(b)

To determine

To state: the formulas used under direct method for computing cash payments made to suppliers.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 12 - Prob. 1Q Ch. 12 - Prob. 2Q Ch. 12 - Prob. 3Q Ch. 12 - Prob. 4Q Ch. 12 - Prob. 5Q Ch. 12 - Prob. 6Q Ch. 12 - Why is it necessary to use comparative balance...Ch. 12 - Prob. 8Q Ch. 12 - Prob. 9Q Ch. 12 - Prob. 10Q

Solution Summary: The author states the formulas used under direct method for computing cash receipts from customers.

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